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Long Term Disability Insurance Feedback: From the Blog Mailbag

Last week’s Toronto Injury Lawyer Blog Post was entitled “Long Term Disability Claim Delay = No Pay (Ontario). If you didn’t check out that blog entry, you can do so here.

We got a lot of positive feedback from our readership which we have been permitted to share with you! We think these comments will provide some helpful insight in to the challenges which people face when making a claim for Long Term Disability Benefits. There is assurance knowing that “you’re not alone” when it comes to understanding how LTD claims work, how LTD policies work, how/why you’re getting denied; and how insurance works in general.

First, an email from Gail M. in Brampton, ON:

Yes, I think that the article on the Toronto Injury Lawyer Blog entitled “Long Term Disability Claim Delay = No Pay (Ontario) is extremely well written. This situation is exactly what happened to me along time ago. I had applied to Sun Life Insurance Company with an LTD claim and repeatedly kept getting turned down. I lived by myself and was a teacher. I had no savings and while I was waiting to hear back from Sun Life with an appeal, I had no money to pay by rent for the next month and had to borrow it from my senior mom and step-father. They were seniors on limited incomes. I did not think to call me teachers’ union at that time to help me out, locally or at the provincial level.

I finally got granted short term disability for two years. I did win my appeal as I had strong analysts’ letter and a strong family doctor at that time. No one suggested that I apply for welfare or ODSP at this time. I also was cut off at the 2 year mark by Sun Life without even telling me. I think that I could have sued them for acting in bad faith as the two letters that were supposed to be sent out to me by sun life were still sitting in my file my benefits department at Peel Board of Education told me. I would like your permission, if possible, to give this article to my local and provincial elementary teachers’ federation so that they can include it in an upcoming issue of our teachers’ magazine. This is sent out to every elementary teacher in Ontario. I would also like your permission to send this for possible reprint in an excellent advocacy group that I belong to as I have fibromyalgia and chronic fatigue syndrome for possible reproduction in an upcoming issue of their newsletter called “Quest”. The group is a charitable one, called “The national me/fm action network” and they are on the internet. Many of their members experience alot of problems getting ltd from the private insurers. This is one of the best articles I’ve ever seen on this topic. Kudos to you! 

Thanks for your positive comments Gail and allowing us to share your experience dealing with Sun Life for our readership. I’m sure that people who are fighting for their LTD benefits will find it re-assuring knowing that they’re not along in their struggles, and there are others out there who have gone through some big struggles and tough times in order to make ends meet. The important thing to take away from Gail’s email is that you’re not alone; and a denial can happen to anyone. You have to fight.

Now, an email from Charles S. in London, ON:0001r_Goldfinger-200x300

Hi Brian,

I am really enjoying reading your blog. Full disclosure: my corporate background includes the design of LTD products for two large insurers, and their corresponding reserving and funding arrangements for small and large employers/plan sponsors(but not the adjudication side of the business—I swear!).

As you know, knowledge of how insurers measure open case performance in financial and non-financial terms gives insights into effective dispute resolution and settlement strategies. Your LTD blog posts are a great public service in my view, in that they simplify for lay persons what is (unnecessarily I would say) a complicated field that is littered with administrative and contractual landmines; hence requiring expert advocacy.

Thanks for your email Charles. Always great to hear from a former insider in terms of how things work on the insurance end. Interesting to hear a former insider commenting that LTD claims are unnecessarily made complicated. Is this done on purpose to protect the public, to protect the employer, protect the insurer or for everyone’s benefit? I will let you be the Judge.

What’s interesting to note about Charles’ email, is that he makes reference to terms like “reserving” and “funding arrangements“. These are industry terms not commonly thrown around by members of the general public.

The term reserve” or “reserving” is significant for your average LTD claimant. At the outset of a claim, before it’s really had a chance to get started, an adjuster or analyst at the insurance company will set a “reserve” for the claim. This means that they will set aside some money for the claim’s potential payout. Think of it like setting a budget for the claim. This is important for the insurance company to do. It provides them with a degree of financial certainty, so that they can proceed with their daily business affairs. With thousands of claims on the go at any given time, the insurer needs to know what their potential liabilities and risks are.

Reserving a claim is follows a somewhat mathematical formula. If the claimant is 64 years old, and benefits run until the age of 65; then setting a reserve is quite simply. All you need to do is set a reserve at 12 months of benefits; because the claim will be over after that 12 month period.

Setting reserves becomes a bit more difficult when dealing with a younger claimant, CPP Offsets, other Collateral Benefit Offsets, COLA Increases, or decreased LTD benefit rates following a certain period of time.

In any event, setting reserves sets the tone for an LTD case at the outset; and it’s one of the most important functions for the insurer to do. If the reserves are set too lightly, it can prove disastrous for a claimant. Particularly if the claim is not reported properly. But, if done right, it can prove to be a win for the insurer and a win for the LTD claimant as well.

Have a safe and festive Holiday and New Year from the team at Goldfinger Personal Injury Law. Arrive Alive. Don’t Drink and Drive.

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